Newbie Advice Please
Any suggestions of what makes sense for a first timer with not alot of reserve cash? What makes more sense in the beginning, rehabing & then resell or rehabing & renting as section 8.
In either case what are the good sources to find properties? :-?
Hi
Being a landlord takes a certain mindset. You have to get used to late payments and upkeep on your rentals. Can you handle a call at 7pm sunday night telling you their toilet is broken, or thay have a plumbing leak, or the washer wont work? There are alot of negatives in being a landlord. That said you can do it and it can be profitable. Some investors are buying properties and renting them for a year or 2 then selling them and getting the equity increase the 2 years have given them. I haven't done sec.8 but I use sec8 as a base line for what I charge for rent. Another downside of renting is depriciation. When you sell a rental you have to deal with the tax consequence of depriciation. I have several rentals and have had for several years. My thinking is to sell them and any NEW properties, buy them to sell ONLY. Thats the solution for me. Your situation may be different so get as much advise as you can before you make a choice. My vote is for reselling
Just a thot
Joe
Thanks Joe,
How do you find your properties & how do you resll them? Do you use a realtor in either or both cases?
Tony
Your background should help you more so than hinder you. If you are looking for immediate cash flow, I would start with securing properties with an Assignment clause. Most people trying to do this evaluate the investment through their eyes with little or no experience. Let the investor do the analysis. He knows how to make it work. But you have to provide much mnore than a list of properties for sale.
Speaking for myself, if a property is being submitted for my evaluation I need the following:
1. Why get involved with this property.
2. What are the comps (third party sources).
3. What other properties are for sale nearby.
4. What is the area like (schools, shopping centers etc.).
I need to be at least 25% or higher below FMV or I need to be able to create financing to make it feasible for my buyer to be able to make the monthly payments but buy at a higher price.
Granted, I do have experience. I would not disregard a person trying to find investments for me with little information. After talking with me they will know what I need. However, There is only so much baby-sitting I can do before I will expend my efforts with someone else.
If cash flow is not an issue, understand the principle of using Other Peoples Money (OPM). This will lead to greater profits.
Focus on one type of investment first, SFhs, Multi-Units, Land, Commercial etc. Once you understand how to make investments in that field (both buying and selling), continue but also go into another area of investments.
I started in SFHs 1983 (buy /hold for cash flow), next Land 1988 (assignments first, then flip), then 1995 Commercial (flip), now back to houses for cash flow.
Hope this helps.